US defies Moscow with list of Russian elite

The Trump administration has listed scores of Russian businesspeople and senior officials identified for their “closeness to the Russian regime” and wealth, ignoring warnings not to do so by the Kremlin.

But it stopped short of announcing new sanctions against the Russian business leaders, as many in Congress had demanded and Moscow’s business elite had feared, arguing that existing measures are already having an impact on Russian activities abroad.

The US Treasury report, published in Washington around midnight ahead of a deadline mandated by congress, was required by legislation passed last year intended to ensure the Trump administration, which has been accused of pandering to Mr Putin, keeps up pressure on the Kremlin over military intervention in Ukraine.

But the state department said no new sanctions would be forthcoming, arguing passage of last year’s legislation was sufficient.

“Foreign governments and private sector entities have been put on notice . . . that significant transactions with listed Russian entities will result in sanctions,” the state department said. “If the law is working, sanctions on specific entities or individuals will not need to be imposed because the legislation is, in fact, serving as a deterrent.”

The administration’s balking on new sanctions cheered Russian financial markets. After initially slipping on publication of the list of names, which included virtually every senior member of Mr Putin’s inner circle — including spokesman Dmitry Peskov — Russian equities bounced back in early European trading.

The Moex index of leading Russian shares dipped 0.5 per cent in early trading Moscow time but by midday was up by 0.3 per cent on the day. Some companies linked to individuals named by the US have suffered, however. Norilsk Nickel is down 1 per cent, while Rusal is down 2.9 per cent.

The publication of the list angered Russian leaders. A spokesman for Igor Sechin, the head of Russian oil company Rosneft who is already subject to US sanctions imposed in 2014, said the list was based on “vicious principles”.

“We do not comment on sanctions, in principle, it is counterproductive . . . but we were ready for this, although I see nothing in it which is correct and logical,” said Mikhail Leontiev, the spokesman. “There is nothing surprising in this, given the principles on which these lists are formed . . . principles which are vicious from the outset.”

The Treasury department list includes the heads of Russia’s state agencies and state-run corporations and high-profile mayors, governors and members of parliament. In addition to Mr Sechin, it includes some of the biggest names in Russia’s private sector and state-run business.

It lists Herman Gref, head of Sberbank, and Andrei Kostin of VTB. It also includes almost 100 billionaires, including Roman Abramovich, Oleg Deripaska and Alisher Usmanov.

Treasury produced the report after congressional Republicans and Democrats pushed for the measure, which made it harder for President Donald Trump to ease sanctions.

The report comes as Mr Trump continues to come under scrutiny over his relationship with Russia and Mr Putin. Since his inauguration, he has only on rare occasions criticised Mr Putin and the Kremlin. Meanwhile, Robert Mueller, the US justice department special prosecutor, is continuing his high-profile investigation into possible collusion between Trump presidential campaign officials and Moscow.

The “Countering America’s Adversaries Through Sanctions Act”, or Caatsa, required the Treasury to identify senior political figures and oligarchs based on their closeness to the regime and their wealth.

The unclassified version lists 96 oligarchs with an estimated wealth of $1bn or more. The classified version, which was not released, was expected to include details on how close they are to Mr Putin and his ruling elite, and any information outlining their involvement in corrupt activities.

Alexei Navalny, the anti-corruption activist who is attempting to challenge Mr Putin in March’s presidential elections despite an official ban, said the report was a “realistic list describing what we could call the ‘Putin mafia.’ Obviously, these people have different roles, but they are absolutely the backbone of a corrupt regime and they get significant personal benefits from it.”

Many Russia experts had expected the public report to shine a light on Russian businessmen and officials deemed to have a close relationship with Mr Putin, providing a road map for future sanctions. But the unclassified version appeared to include little consideration of any political influence.

Arkady Dvorkovich, deputy prime minister, told reporters the list amounted to a “who’s who in Russian politics book”, according to the Interfax news agency. “As a member of the government I have to be on the list,” he said.

Konstantin Kosachev, chair of the foreign affairs committee in the upper house of parliament, wrote on Facebook that the list “gives the firm impression that US secret services, desperate to find the provable kompromat they promised on Russian politicians, just copied the Kremlin phonebook”.

Spokespeople for several oligarchs on the list replied by sending a screenshot pointing to the unclassified report’s $1bn criteria for inclusion. The list included a few businessmen with no obvious links to the Kremlin, including Yandex’s Arkady Volozh, supermarket magnate Sergei Galitsky and online bank entrepreneur Oleg Tinkov.

Instead, the 96 people on the oligarch list correspond exactly to the 96 billionaires on last year’s Forbes list of Russian billionaires. The classified version of the report may include businesspeople worth less than $1bn.

Additional reporting by Henry Foy in Moscow

This story has been amended since initial publication to clarify that the US report identified Russian oligarchs as those with an estimated wealth of $1bn or more